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Pan African Mining: A Prospect Generator: Multiple Lucky Shots at Success by John Lee 02/25/2008 Symbol: PAF.V, PAFRF.PK
Pan African Mining explores and develops mineral properties in Africa. The focus of the company is on gold, metals, coal, diamonds, precious stones and Uranium properties. Regions of interest include Mozambique, Botswana, Namibia and South Africa and Madagascar, where intensive drillings are currently underway. PAF is the sister company of Sacre-Coeur Minerals (SCM.v), and is also managed by the same corporate office in Vancouver. PAF is a very interesting and unique play. In early 2002, its CEO Irwin Olian went to Madagascar and worked with public and private enterprises to lock up all valuable mining assets before any other foreign company came looking for projects. Specific projects that PAF own include: In February 2008, PAF confirmed a gold bearing trend of over 8.5 km at the project, with 70 samples over 0.5 g/t Au, 24 samples greater than 3.0 g/t Au. These include 12 panel samples between 5 and 10 g/t Au, one grab sample at 14.3 g/t and another grab sample at 71.6 g/t Au (See the news release here) There is a diamond rig doing double shifts and Mr. Olian is trying to locate a new rig to test the newly discovered trend. Uranium: Drill highlights 6 meters – 3.44 lbs Tranomaro was mined open pit style by the French. PAF drilled and confirmed multiple areas of Uranium occurrence beneath and surrounding the old pit. There is a diamond rig turning double shifts. Uranium is currently selling at over $75/lb. Coal: The Program aims to test an initial target of 100 million tonnes of in situ coal near surface within 52 squares covering 325 sq. km. of the Company’s license area. The average coal seam thickness ranges from 1 to 5 meters and extends for tens of kilometers in length. Sakoa has the potential to turn into a world class coal project with hundreds of million tonnes of coal in resource. With China turning into a net coal importer and spot price of coal at over $100/tonne, Sakoa is the envy of junior coal explorers. Diamonds (wild card): Irwin Olian has been working with one of the world’s top diamond geologists, Dr. Andy Moore. PAF has staked an incredible 3000 sq km in one of the world’s most prolific diamond exploration hot bed in northwest Botswana (which is the world’s number one gem diamond producing country). What is notable is PAF’s Okavango licenses are adjacent to claims recently acquired by De Beers in Botswana, and that Company’s Namibian affiliate (Namdeb) in neighboring Namibia. This activity has been stimulated in part by an increasing consensus that the Congo craton, which hosts important economic diamond deposits, extends into northwest Botswana. Furthermore, this area is strategically located close to two major surface concentrations of diamonds and G10 garnets in the vicinity of Omatako and Tsumkwe, west in Namibia. It could therefore host the primary kimberlite sources of these two important unexplained kimberlite pathfinder anomalies. No diamonds have yet been found to date but through a news release in January 2008, PAF confirmed the several targets of mineralization with diamond bearing signatures (Click here for the news release). Based on this news, RBC bought well over 200,000 shares in one week. Lots of work still needs to be carried out but PAF could have a true world class diamond project here. Mining in Madagascar Larger than California and Oregon combined, Madagascar is the world's fourth largest island. Situated off the coast of Africa in the Indian Ocean about 420 km east of Mozambique, its present population is approximately 15 million. Madagascar set a favorable foreign investment climate following the democracy-establishing general election led by President Mark Ravalomanana. We have met with the Country’s Minister of Mining, Director of Mines, and numerous other local officials and government administrators in order to properly evaluate the investment climate and understand the nature of requirements to do business in Madagascar. Madagascar has an abundance of unexploited precious and semi precious gemstone and gold deposits, as well as large deposits of bauxite, coal, uranium, copper, lead, manganese, nickel, platinum, titanium, zinc and zirconium. The country has just completed widespread government reforms, including many in the mining sector, that now make it more attractive to outside investment. Most think the political situation is more stable than it has ever been before, with the president focusing on economic/business development as a major thrust to growing the economy and improving the way of life in Madagascar. Lastly, many of the world's economic development institutions such as USAID, the International Monetary Fund and The World Bank Group have committed significant investments and resources to improve several areas of interest, including a 5-year reform program designed to attract large-scale mining projects. Conclusion: I tend to typically avoid prospect generators, which are used to describe companies with multiple good projects. However, I often view them as companies without a flagship project. And fundamentally, at $40 million market cap., the stock may seem expensive without a 43-101 resource. Yet, PAF is the only prospect generator I own because its gold, uranium, and coal projects have enough merits to deserve their own trading shells. Technically, in 2007 the stock rode the Uranium wave to $3.5, and has subsequently dropped back to its long term 2 year base at $2 similar to all the other Uranium juniors. Investors have only now to begin realizing PAF’s other potential in gold, diamond, and coal. With over $5 million and 5 rigs to carry its exploration programs in 2008, PAF stands well to gain markedly from here should it make a sizable discovery in any of its projects.
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